WAILUKU - Nobody came out last week and demanded that the Maui County Council chuck out its two-year-old Residential Workforce Housing ordinance, but developers and nonprofit leaders said it needs some tweaking to be more effective.
Some developers would like to see the controversial ordinance ditched. However, more importantly, they probably didn't want to sour relationships with council members who support the measure, a few observers said Wednesday.
Public Services Committee Chairman Wayne Nishiki took up the required review of the ordinance in the new committee's first meeting of the year. The ordinance requires developers of five or more market-priced residences to build 40 percent to 50 percent of the total project as affordable homes either on-site or somewhere in the same community plan area - or contribute land or cash payments in lieu of new homes. The panel will revisit the issue Wednesday.
"At our next meeting now we can start fresh and start head on into discussions of the ordinance," Nishiki said after listening to about a dozen speakers last Wednesday.
He also called on council members to submit possible ordinance amendments in writing.
Many of the amendments recommended by developers and nonprofit builders Wednesday were the same. They also shared similar reasoning: A lack of homes built in the past two years proves the ordinance is flawed, and the economic downturn necessitates extra incentives to build.
But some council members argue that the ordinance is already a success because projects have been approved under the ordinance but have been held up only because of the sour housing market and the broken national home lending system. Construction of affordable homes will pick up once the housing market gets back on track, proponents said.
Here's several of the proposed fixes:
* Lower the affordable housing requirement to 30 percent to 40 percent.
* Let nonprofits, which often build projects consisting entirely of affordable homes and are then exempt from the law, qualify to sell home credits to developers for profit or financing.
* Allow 50 percent of the affordable homes a developer must build to be done outside the community plan area.
* Permit donations of land to include unimproved lots, which is land without roads, water and sewer access.
* Make the ordinance a "living document" that can be easily changed to match housing market deviations.
* For every affordable unit that a private developer builds, he or she should receive two credits to construct market-priced homes.
* Speed up the county's building permitting process.
"We need to put our people back to work," said former county Housing and Human Concerns Department Director Alice Lee, who had opposed the bill during her tenure. "We need to look at the tools in the ordinance and find a way to make it more attractive and make it work."
Lee owns a housing consulting firm. She represents several nonprofits that create affordable housing but said she wasn't speaking on behalf of any particular project.
KSD Hawaii President David Goode's development company built affordable homes in Makawao and market-priced homes in Kula, which was one of the few projects to follow the ordinance. He said he supports the framework, but it needs some work, such as removing 25-year deed restrictions that require the homes to remain affordable even in resale. In the process, it keeps Hawaii banks away as lenders, he said.
"We would like to do more units, but the current economic environment and lack of available water meters around the county make it nearly impossible," Goode said.
More local developers or their representatives were in the sparse audience Wednesday but chose not to testify before the committee, which is made up of the entire County Council.
Most of the speakers operate nonprofits, such as Maui Economic Opportunity, Lokahi Pacific and Habitat for Humanity Maui.
MEO Executive Director Sandy Baz also supported the transferability of housing credits, saying it gives nonprofits the ability to create more partnerships for affordable housing projects, which often have up to a dozen contributors.
In a time of evaporating government and donor support, nonprofits need more funding sources, said Kamaile Sombelon, executive director of Lokahi Pacific.
But council Chairman Danny Mateo, who authored the original bill to remedy Maui's affordable housing deficit, said nonprofits have benefited extensively from the work force housing ordinance. Instead of building affordable units themselves, developers have given money to the nonprofits to construct projects they would never be able to do otherwise, Mateo said.
He also noted that nonprofits already receive exemptions for their projects from the county that private developers would rarely, if ever, get.
Council Member Joe Pontanilla said he was concerned that developers would use what are really affordable housing credits to build more market-priced homes.
"I really have a hard time swallowing that we should transfer credits," Mateo said.
Council members Jo Anne Johnson and Mike Victorino did not want developers to build affordable units outside the community plan areas of their projects. They said the original bill's intent - which they support - is to make it possible for people to live close to where they work. The requirements save money on infrastructure needs and islandwide traffic congestion, they said.
Former County Council candidate Kai Nishiki, who is the committee chairman's daughter, said she supports increasing the percentage of affordable units that a developer must build.
She also called on councilors to eliminate the provision that allows developers to build affordable housing offsite.
"So it does not promote segregation in our community," Kai Nishiki said.
Sherri Dodson, executive director Habitat for Humanity Maui, said very few affordable homes have been built since the ordinance took effect.
"It would seem some changes are necessary," she said.
Mateo said flexibility was built into the ordinance, and that's why committee members were meeting last week.
"It seems some insist the policy has not been a success," Mateo said. "That simply is not true. More than 1,000 units of affordable housing have been approved through this ordinance."
He also reminded testifiers that it's not the county's fault that some of the approved affordable housing projects to date have been held up by private litigation.
* Chris Hamilton can be reached at chamilton@mauinews.com.
